The finding is at odds with that of last year’s parliamentary inquiry, in which a majority comprised of Labor MPs and crossbencher Sam Duluk declared the then-Attorney-General had actual and perceived conflicts when she rejected the long-stalled application by Kangaroo Island Plantation Timbers to build a deep-sea port to facilitate timber export from the island.

That inquiry opted to send the matter to Ombudsman Wayne Lines for review.

But that investigation today came to an entirely different conclusion, with Lines’ report finding Chapman “did not have a conflict of interest, whether actual, potential or perceived, when she decided the Smith Bay application”.

He further found she did not breach the Ministerial Code of Conduct by not advising then-Premier Steven Marshall of a conflict of interest, and that she did not commit maladministration in deciding the Smith Bay application.

Marshall and all other public officers questioned by the committee, including departmental CEOs who said they had not raised the potential for conflict with Chapman, were likewise cleared of maladministration.

The parliamentary inquiry also found Chapman had misled parliament over her public statements regarding a potential conflict, with the matter prompting a vote of no confidence last year.

She refused to stand down but did so days later after the Ombudsman began his own inquiry.

Chapman has since flagged her resignation from parliament altogether – and is currently in a stand-off as to whether she has resigned already simply by tendering her letter of intent to the Speaker, Dan Cregan.

Chapman today attended parliament to be sworn in by the chief justice Chris Kourakis, but left soon after and has not returned to the House of Assembly.

She told InDaily earlier this afternoon that she “continues to be the Member for Bragg”.

Asked about Cregan’s advice that she should not return to parliament, she said: “I don’t have any comment to make on that – all communications will be with his office, and that’s up to the lawyers.”

Later today Cregan tabled those communications, telling parliament he had been advised not to issue writs for a by-election in Chapman’s safe eastern suburbs seat while the matter was “in dispute”.

He was advised to table his correspondence with Chapman and told “it would be prudent for the chief justice not to swear Ms Chapman in” in the meantime.

He said he was also advised that “the House need not deal with the matter immediately, but she should not sit as a member nor vote on any matter”.

Chapman is yet to comment on the Ombudsman’s findings, but Opposition Leader David Speirs said in a statement the report “exposes Peter Malinauskas and his senior Labor ministers of having a total lack of understanding of what is a conflict of interest and how to comply with the Ministerial Code of Conduct”.

“The Ombudsman rejected a series of accusations made by Labor in Parliament, severely damaging Peter Malinauskas’ credibility,” said Speirs, who is isolating this week after contracting COVID.

“Peter Malinauskas’ abysmal ignorance of the fundamental requirements of good governance processes is inexcusable.

“This raises serious questions about Peter Malinauskas’ leadership and his willingness to prioritise his lust for power above the impartial assessment of evidence.

“He even said this matter was a threat to investor confidence in South Australia. He now owns responsibility for that.”

The Liberal leader called on the Premier to “apologise for the conduct of his party and commit to completing training in how to deal with conflicts of interest and Ministerial Code of Conduct compliance, ensuring Labor’s mistakes aren’t repeated in future”.

In his report, Lines noted “there was a potential for an ethical issue to arise due to Ms Chapman’s connections to Kangaroo Island”, where she grew up and her father Ted was a long-serving MP.

But he found “it would not have been obvious that she likely had a conflict of interest”, which would have required “a full appreciation of the details of the Smith Bay application as well as the nature of her interest in and use of the [family] property” at Gum Valley.

“In my view, Ms Chapman was in the best position to assess whether or not she was in a position of conflict of interest in respect of the Smith Bay application,” he said.

KIPT executives had argued that Chapman had flagged her opposition to their proposal to build a port at Smith Bay as early as 2017.

She was, at the time, in Opposition and held no ministerial authority for the development.

Lines, however, found that Chapman attended the meeting “not as a decision-maker” and despite “expressing a view, perhaps even a firm view, that Smith Bay would not be a suitable site for a port, the discussion took place at least three years before she first assessed the Smith Bay application in September 2020 and at a time when it was still being developed, with no Environmental Impact Statement having yet been undertaken”.

“Ms Chapman was not stating opposition to the concept of an additional port being built on Kangaroo Island to facilitate the export of timber products; rather she was contributing to a discussion about how KIPT’s proposal could be advanced by considering alternative locations for a port,” he found.

“Ms Chapman never committed publicly to opposing or advocating for the proposal at any time between the meeting and her appointment as Minister for Planning and Local Government.”

He said it “should be obvious that, without more, Ms Chapman’s involvement in the 2017 meeting did not create a private interest that could then be in conflict with her public duty”, and “without a relevant private interest, neither an actual nor perceived conflict of interest can arise”.

Concerns were also raised about Chapman’s property holdings on the island, with one site advertised on tourism site Airbnb – although she insisted it wasn’t used as such.

Lines found Chapman gave “a reasonable explanation” as to how the property came to be marketed on AirBNB but noted “the way it is promoted on the Airbnb website in early 2020 gives the impression that it was” a tourism business.

However, he found, submitted Assessment Reports “suggest that the economic impact on accommodation providers will be neutral”.

“I am of the view that nearly all of Ms Chapman’s knowledge about the Smith Bay application and its relationship to her property interest could be attributed to the reasonable and fair-minded observer,” he found.

Lines was also critical of the manner in which the matter was referred to him, saying the matters to be investigated were not expressed “in a way that employs the terminology of my investigation functions, namely, investigations about ‘public administration’, ‘misconduct in public administration’ or ‘maladministration in public administration’, so as to come unambiguously within the Ombudsman jurisdiction”.

“It is unfortunate that the Select Committee, in contemplating a referral to me, did not seek my view on how a referral should be conveyed so that its compliance with the Ombudsman jurisdiction was free from doubt,” he noted.